For a few days, AI chip juggernaut Nvidia sat on the throne as the world’s biggest company, but behind its staggering success are questions on whether new entrants can stake a claim to the artificial intelligence bonanza.

Nvidia, which makes the processors that are the only option to train generative AI’s large language models, is now Big Tech’s newest member and its stock market takeoff has lifted the whole sector.

Even tech’s second rung on Wall Street has ridden on Nvidia’s coattails with Oracle, Broadcom, HP and a spate of others seeing their stock valuations surge, despite sometimes shaky earnings.

Amid the champagne popping, startups seeking the attention of Silicon Valley venture capitalists are being asked to innovate — but without a clear indication of where the next chapter of AI will be written.

When it comes to generative AI, doubts persist on what exactly will be left for companies that are not existing model makers, a field dominated by Microsoft-backed OpenAI, Google and Anthropic.

Most agree that competing with them head-on could be a fool’s errand.

“I don’t think that there’s a great opportunity to start a foundational AI company at this point in time,” said Mike Myer, founder and CEO of tech firm Quiq, at the Collision technology conference in Toronto.

Some have tried to build applications that use or mimic the powers of the existing big models, but this is being slapped down by Silicon Valley’s biggest players.

“What I find disturbing is that people are not differentiating between those applications which are roadkill for the models as they progress in their capabilities, and those that are really adding value and will be here 10 years from now,” said venture capital veteran Vinod Khosla.

– ‘Won’t keep up’ –

The tough-talking Khosla is one of OpenAI’s earliest investors.

“Grammarly won’t keep up,” Khosla predicted of the spelling and grammar checking app, and others similar to it.

He said these companies, which put only a “thin wrapper” around what the AI models can offer, are doomed.

One of the fields ripe for the taking is chip design, Khosla said, with AI demanding ever more specialized processors that provide highly specific powers.

“If you look across the chip history, we really have for the most part focused on more general chips,” Rebecca Parsons, CTO at tech consultancy Thoughtworks, told AFP.

Providing more specialized processing for the many demands of AI is an opportunity seized by Groq, a hot startup that has built chips for the deployment of AI as opposed to its training, or inference — the specialty of Nvidia’s world-dominating GPUs.

Groq CEO Jonathan Ross told AFP that Nvidia won’t be the best at everything, even if they are uncontested for generative AI training.

“Nvidia and (its CEO) Jensen Huang are like Michael Jordan… the greatest of all time in basketball. But inference is baseball, and we try and forget the time where Michael Jordan tried to play baseball and wasn’t very good at it,” he said.

Another opportunity will come from highly specialized AI that will provide expertise and know-how based on proprietary data which won’t be co-opted by voracious big tech.

“Open AI and Google aren’t going to build a structural engineer. They’re not going to build products like a primary care doctor or a mental health therapist,” said Khosla.

Profiting from highly specialized data is the basis of Cohere, another of Silicon Valley’s hottest startups that pitches specifically-made models to businesses that are skittish about AI veering out of their control.

“Enterprises are skeptical of technology, and they’re risk-averse, and so we need to win their trust and to prove to them that there’s a way to adopt this technology that’s reliable, trustworthy and secure,” Cohere CEO Aidan Gomez told AFP.

When he was just 20 and working at Google, Gomez co-authored the seminal paper “Attention Is All You Need,” which introduced Transformer, the architecture behind popular large language models like OpenAI’s GPT-4.

The company has received funding from Nvidia and Salesforce Ventures and is valued in the billions of dollars.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Nvidia Corps.’s chief executive Jensen Huang has become the 11th richest person in the world, as per Forbes’s real-time billionaire list. 

Mr Huang added over $4 billion to his net worth in a single day on Tuesday, June 18. It happened after Nvidia became the world’s most valuable public company, riding on an artificial intelligence-driven surge. 

The company’s shares climbed over 3% on Tuesday, June 18, taking Mr Huang’s net worth to nearly $119 billion.

Nvidia shares have more than doubled this year after growing threefold in 2023. The shares have been up by nearly 28 times in the past five years.

Jensen Huang, who was ranked the 546th-richest person in the world in 2019, has added over $114 billion to his net worth in the last 5 years, as per Forbes. His net worth surged over 2250% during the period.

The Nvidia boss was ranked the 76th richest person in the world with a net worth of $21 billion at the end of 2023.

The 61-year-old tech executive derives his net worth from a 3.5% stake in Santa Clara, California-based Nvidia. Mr Huang co-founded the computer chip company back in 1993 with Chris Malachosky and Curtis Priem. He has occupied the chair of Nvidia’s chief executive and president since its inception.

The tech giant went public in 1999 and has surged in trading in recent years. 

Last month, Nvidia became the first computer chip company to hit $3 trillion in market capitalisation, surpassing Apple Inc. Nvidia recently executed a stock split that cut Nvidia’s share price below $130 after trading above $1,200.

Nvidia controls an ecosystem of hardware and software solutions that rivals are trying to replicate, thanks to its dominant market share for the high-end accelerator that trains AIs. The company has laid out an ambitious plan to upgrade its AI accelerators annually. 

Tesla’s Elon Musk retained his position of the world’s richest with a net worth of $214.1 billion followed by Jeff Bezos at number two and Bernard Arnault & family at the third spot.

A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023.
| Photo Credit: Reuters

Nvidia edged ahead of other tech companies on June 18 to become the world’s most valuable publicly traded company in the latest sign of the might of artificial intelligence.

The chip company, which has enjoyed a monumental ascent over the last 18 months amid enthusiasm over generative AI, jumped 3.4% near 1.25 p.m. (10.55 p.m. IST), giving it a market capitalisation of about $3.3 trillion, slightly ahead of Microsoft and Apple.

The California-based company, which is led by Jensen Huang, has seen profits soar due to torrid demand for its powerful GPU chips, which have set the industry’s pace in pushing new advances in AI.

In May, Nvidia reported a net profit of $14.9 billion, while its revenue of $26 billion was almost four times what it took in during the same fiscal quarter last year.

“We believe over the next year the race to $4 trillion market cap in tech will be front and center between Nvidia, Apple, and Microsoft,” said a note earlier this week from Wedbush Securities.

“Nvidia’s GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th Industrial Revolution well underway.”

Washington:

Nvidia edged ahead of other tech companies Tuesday to become the world’s most valuable publicly traded company in the latest sign of the might of artificial intelligence.

The chip company, which has enjoyed a monumental ascent over the last 18 months amid enthusiasm over generative AI, jumped 3.4 percent near 1725 GMT, giving it a market capitalization of about $3.3 trillion, slightly ahead of Microsoft and Apple.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The fervour around artificial intelligence has sparked a gold rush into AI-themed ETFs, as investors seek fresh ways to play the burgeoning technology following breathtaking rallies in market darlings such as Nvidia .

The funds run the gamut from those offering a bouquet of the biggest AI winners to more esoteric themes such as robotics and sound generation. All told, the universe of AI-themed ETFs traded in the United States has soared to $6.88 billion as of the end of February from $2.55 billion a year earlier, Morningstar data showed.

“It’s still so early in the evolution of this category … that investors are still sorting through the possibilities,” said Will Rhind, founder and CEO of GraniteShares.

The exuberance surrounding AI funds echoes previous waves of investor excitement for other technologies viewed as transformative, from dotcom stocks to electric vehicles.

Each wave introduced major new businesses to the economy and generated astonishing wealth for founders like Jeff Bezos and Elon Musk as well as ordinary investors. At the same time, many of the companies whose shares soared in previous market booms eventually saw their stock prices fizzle, a fate that may await some of the market’s current AI favourites.

For now, investors are responding with enthusiasm and Nvidia — whose chips are seen as the gold standard in AI — continues to grab the spotlight.

The assets of the GraniteShares 2x Long NVDA Daily ETF , which seeks to deliver twice the daily return of the chipmaker’s shares and is not included in Morningstar’s data on AI-themed funds, doubled to $2 billion earlier this month. Those flows have followed the nearly 80% climb in Nvidia’s shares so far this year, after the company’s shares tripled in the year 2023.

Speedier chip

At its developer conference on Monday, the company unveiled the Blackwell B200, an AI chip it says is up to 30 times speedier than its previous chip.

Smaller ETFs have also prospered. Assets in the Themes Generative Artificial Intelligence ETF tripled to about $20 million from $7.5 million earlier this month, said Taylor Krystkowiak, investment strategist at Themes ETFs.

Seven of the 18 diversified AI-related ETFs that Morningstar tracks have launched within the last three years. An eighth was redesigned to target AI more directly.

The funds have had collective inflows of $2.68 billion in the last 12 months, according to Morningstar. That is almost double the inflows into global real estate ETFs, the firm said.

Fuelling bubble

Whether investor excitement about the possibilities of AI is fuelling a bubble or just contributing to a strong bull run in stocks is unclear.

The S&P 500 is up nearly 8% year-to-date, fuelled in part by rallies in AI beneficiaries such as Nvidia and Microsoft , following a 24% gain last year.

The AI fervour has also driven parabolic moves in the shares of other companies, including a more than 250% gain in Super Micro Computer, which joined the S&P 500 this week.

Limiting exposure

Some investors appear to be limiting their exposure to Nvidia and other stocks that have notched big moves. ETF issuer Global X found that its Global X Artificial Intelligence and Technology ETF, which caps Nvidia exposure to 3%, has tripled in size over the last three months.

By comparison, its Robotics and Artificial Intelligence ETF, which has more than 20% of its assets invested in the chipmaker, grew by 20%.

Others are focused on finding new areas that will benefit from AI, said Rene Reyna, head of thematic ETF strategy at Invesco and manager of the Invesco AI and Next Gen Software ETF.

‘Changing landscape’

“The conversations we have with investors don’t focus on finding the next Nvidia, but more on recognising that these technologies are changing the landscape and finding ways to get exposure to some of this growth,” he said.

Analysts at Morgan Stanley last week published a list of 480 individual stocks that may benefit from AI.

Less obvious beneficiaries included Walmart and Caterpillar. The bank also recommended exploring “less crowded sub-themes” like the integration of AI and smartphones.

ETFs are also scrambling to provide offerings for every taste.

Robo Global Robotics & Automation ETF supplements its Nvidia exposure with holdings in stocks some expect to benefit from AI technology, like Intuitive Surgical.

The Roundhill Generative AI & Technology ETF is focusing on companies it expects to be beneficiaries of generative AI, including Salesforce.com and Marvell Technology.

Sees outflows

Still, at least one flavour of AI-themed ETF has failed to win fans. The WisdomTree US AI Enhanced Value ETF, which uses AI to select its portfolio, has seen outflows of $48.26 million in the last 12 months and lags the S&P 500.

One possible reason the fund and others in its category have underperformed: many of them lack a position in Nvidia and other AI-related stocks.

It’s a sultry March evening in the suburbs of Mumbai and a group of men hovers anxiously at the back gate of a startup called Yotta Data Services. They pace, pause, and fret. It’s approaching midnight, 10 hours late, when a truck pulls up with the precious cargo they’ve been waiting for: semiconductors from Nvidia Corp.

The company’s products are so coveted because they’re essential for the development of artificial intelligence, the technology that’s set off a frenzy in industries around the world. While companies like OpenAI and Google have poured billions of dollars into such chips in the US, Yotta is making India’s largest bet yet on the promise of AI.

Sunil Gupta, chief executive officer and co-founder, has gotten a jump on the country’s better-known technology players and conglomerates in part because of the relationship he’s forged with Jensen Huang, Nvidia’s celebrity CEO. Yotta is expected to feature at Nvidia’s developer conference on Monday in California, an early example of the potential for AI in markets beyond the US.

“I’m ambitious, I’m hungry,” said Mr Gupta, 52. “I’m willing to take a bet on the future of AI.”

Yotta’s strategy is to offer high-performance computing capabilities from data centers in India so the country’s corporations, startups and researchers will be able to develop their own AI services.

Nvidia’s chips, the most advanced on the market, are essential for training large language models and building applications like OpenAI’s ChatGPT and Microsoft Corp.’s coding assistant, GitHub Copilot.

Mr Gupta figures he’s got an edge over cloud computing services outside the country because of latency issues, and he vows to offer the least expensive access to Nvidia AI chips in the world. He’s even considering letting Indian startups with tight budgets give him equity instead of cash.

Demand is on his side. The global AI market is projected to grow from $168.5 billion in 2022 to over $2 trillion by 2032, according to a report by Spherical Insights & Consulting.

“This is a gold rush,” said Stacy Rasgon, an analyst at Sanford C. Bernstein. “It’s still the early days of AI, and companies just can’t buy enough of this stuff.”

The new era got off to a rocky start this month in India. The country’s customs officials were flummoxed by the unusually high value of the Nvidia chips that Yotta had purchased, leading to requisitions of additional paperwork and bureaucratic approval. Back in his data center outside Mumbai, Mr Gupta paced the marble floors of the lobby for the better part of a day, working the phones to get his chips released.

The delivery truck finally pulled up and workers unloaded the first of more than 4,000 H100 chips that Yotta ordered from Nvidia. The beefy graphics processing units, or GPUs, run $30,000 to $40,000 each and are called Hoppers in a nod to computer science pioneer Grace Hopper.

The delivery was a religious experience for Mr Gupta, quite literally. A priest adorned the boxes with red vermilion marks and strings of yellow chrysanthemum flowers, while hymns in ancient Sanskrit filled the night air. A camera-carrying drone recorded as Mr Gupta symbolically smashed a coconut on the floor near the truck. “It’s a dream moment,” he said, amid exploding party poppers.

Yotta’s haul of Nvidia chips, which will reach about 20,000 by June, isn’t huge by global standards. Tech giants like Microsoft Corp. purchase them by the tens of thousands, and Meta Platforms Inc.’s Mark Zuckerberg said he aims to get 350,000 H100s by year-end. Still, Nvidia’s supply is far short of demand so CEO Huang has to calibrate allocations as corporate titans and heads of state press for allotments.

India is getting special attention. In September, Huang met with Prime Minister Narendra Modi and said he would prioritize any orders from data center operators in the country. “You have the data, you have the talent,” Huang said at the time. “This is going to be one of the largest AI markets in the world.”

The next day, Mr Gupta got a call from the Nvidia team asking him if he could meet the CEO in the western city of Pune. Though it was late evening and the meeting would be the next morning, Mr Gupta quickly agreed. He jumped in his car and drove three and a half hours through the night for the confab. It was a demonstration that Yotta would go above and beyond.

Mr Gupta has serious bona fides in the field. He’s been working for decades on data center businesses and co-founded Yotta in 2019 with the backing of real estate billionaire Niranjan Hiranandani. As a cloud computing operator, Yotta offers companies like Wells Fargo & Co access to data storage and computing power they can scale up or down as needed, without buying and installing their own hardware.

Tata Group and Reliance Industries Ltd, two of the country’s largest conglomerates, plan to develop AI infrastructure too, but have yet to order Nvidia’s most advanced chips.

An Nvidia spokeswoman declined to comment on the specifics of Yotta’s order, pointing out that more will be revealed this week. Mr Gupta is speaking at Nvidia GPU Technology Conference, and he has been told Huang will discuss Yotta during his keynote on Monday.

One reason for the attention is a global imbalance in AI. If the technology has the potential to transform virtually every industry, as Huang and Microsoft CEO Satya Nadella argue, then countries like India, Indonesia or Turkey are at risk without access. In India, that could stymie scientific research, startup development and, more broadly, Modi’s ambitions to create a technology superpower. “GPU disparity” is an increasingly popular term for the dilemma.

“Countries who don’t have their own AI infrastructure and models will woefully lose the AI race,” said Umakant Soni, co-founder of a nonprofit AI and robotics research park called ARTPARK.

Mr Gupta sees a clear need to develop India-built AI models, trained with local languages and cultural diversity. “India needs sovereign AI, India needs sovereign models,” he said.

Geopolitics is helping his case. Rising tensions between the US and China have led the Biden administration to levy sweeping controls over the export of technologies to its geopolitical rival, including the very H100 Nvidia chips Yotta is buying. Cloud providers in the Middle East have also come under scrutiny after a key US lawmaker urged the Commerce Department to probe the Chinese connections of Abu Dhabi-based AI firm G42.

Mr Gupta figures he can supply Indian customers and others in Asia and the Middle East. Yotta already has half-dozen data centers in four Indian cities, and a new one opening in India’s northeast. The entrepreneur named his company after the number eight in ancient Greek, representing one septillion.

“India is playing a bit of catchup,” said Nruthya Madappa, a partner with the venture capital firm 3one4 Capital. “But because of the talent base, we see the catchup being very, very fast.”

The seven-floor data center outside Mumbai is surrounded by electric fences, equipped with 850 cameras and includes seven layers of security. Mammoth diesel storage tanks hold enough fuel to run the facilities for 48 hours if the power goes out.

Mr Gupta’s partnership with Nvidia mandates such rigid protocols, along with stringent specs for building the AI cloud business. He’s sealed off the facility’s entire sixth floor for that purpose. An Nvidia team will arrive in the coming weeks to get the network up and running, with a target of starting operations in mid-May. Mr Gupta calls the first H100 cloud service ‘Shakti’, the Hindi word for power.

He says he’s sold out capacity for the day his network goes live, and has a waiting list of companies from India and beyond. Gupta is already looking forward to the next delivery of Nvidia chips, more than 16,000 scheduled for June. He’ll do at least one thing differently though: hire guards since the value of the shipment could run into the hundreds of millions of dollars.

“Security?! I never thought of that!” said Mr Gupta. “A lot of people want these.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

A person takes a photograph of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm on Feb. 22, 2024, in Tokyo.
| Photo Credit: AP

Japan’s Nikkei share average on February 22 surged past the 1989 bubble-era record high, as chip-related stocks led across-the-board gains after U.S. chipmaker Nvidia’s outlook beat market expectations.

The Nikkei rose to a high of 39,029.00, crossing the record high of 38,957.44 scaled on the final trading day of 1989 during the height of Japan’s bubble economy.

At the new peak of 39,029.00 the benchmark has risen 52% from its Jan 2023 trough, supercharged by a tech-rally, corporate governance changes and rising exporters’ profits thanks to a weak yen .

The index was up 1.6% to 38,872.49 by 0429 XX GMT.

Nvidia shares surged 6% overnight after it forecast fiscal first-quarter revenue above estimates on robust demand for its chips that dominate the market for artificial intelligence (AI).

“For us traders, this marks the arrival of a new era. It feels like the stock market is telling us that we’ve finally escaped from deflation and a new world has opened up,” said Tsutomu Yamada, senior market analyst at au kabu.com Securities.

Tokyo Electron jumped 4.95% to give the biggest boost to the Nikkei. The chip-making equipment maker rose 43.5% so far this year, while chip-testing equipment maker Advantest surged 5.7%.

Another chip-related Screen Holdings is up nearly 10% in the current session, while tech-start up investor SoftBank Group rose 4.54%.

Auto parts and automakers rose 2.04% to become the biggest gainers among the Tokyo Stock Exchange’s 33 industry sub-indexes.

Of the 225 components on the Nikkei, 159 stocks rose and 66 fell.